In Australia there is evidence to suggest that by 2022 there were est. 640,000 Australian households whose housing needs were not being met.
These households are either experiencing homelessness, in overcrowded homes or spending over 30% of their income on rent.
This unmet housing need is projected to increase to 940,000 households in 2041.
In a November 2022 the Community Housing Industry Association released a report noting the unmet need in states/territories/regions by number and percentage of all households.
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CHIA, Nov 2022, “Quantifying Australia’s unmet housing need: A national snapshot”, p.2
On 29 June 2022 The Guardian reported:
The public housing waiting list across all jurisdictions rose by more than 8,000 households last year, from 155,141 to 163,508. Most of the increase was among households considered “in greatest need”. While for the last nine years social housing stock remained static at est. 4.2% of all housing stock.
The National Cabinet meeting last Friday, 28 April 2023, ended with these joint announcements by the Prime Minister and state & territories leaders, according to ABC News:
National cabinet has endorsed $2.2b in measures to strengthen Medicare
The announcements include expanding the nursing workforce to improve access to primary care and incentives for doctors to stay open for longer hours
Housing ministers will develop a proposal outlining ways to strengthen renters rights, which will be dealt with by national cabinet later in the year
Work will be undertaken to improve the migration system through increased visa processing capacity and expanding pathways to permanent residency for skilled workers. [my yellow highlighting]
What is clear is that although there may be the intention that a guiding statement on renters rights will eventually be produced by the National Cabinet, it will be left to individual states and territories to decide how and to what degree renters rights will be strengthened.
As for the built-to-rent component of any national plan to increase housing stock, Master Builders Australia sent out a media release immediately after this National Cabinet meeting welcoming a national approach to reforms to address the housing crisis which stated in part:
Master Builders Australia CEO Denita Wawn said the decision to tackle infrastructure investment, planning reforms to increase housing supply and affordability alongside sustainable growth across states and territories is an important signal for the industry.
“Industry will work closely with the Planning Ministers and National Cabinet to ensure all options are on the table and there are no unintended consequences of other reforms that may dampen this effort,” said Ms Wawn.
The Commonwealth Government also announced a series of other measures to boost investment for increasing housing supply including: increasing the depreciation rate [from 2% to 4%] for eligible new build-to-rent projects, and reducing the withholding tax rate for eligible fund payments for managed investment trusts to foreign residents on income from newly constructed residential build-to-rent properties.
However, Master Builders Australia went on to make an ambit claim for further reform:
“More needs to be done to speed up the delivery of new housing in the medium and high-density part of the market over the short term. Government efforts to expand the stock of build-to-rent will provide welcome support.
“The challenge will be to make sure that we put downward pressure on building and construction costs to increase output.
“Builders continue to face regulatory burdens and prolonged delays in approvals for building applications, occupation certificates and land titles. Additionally, land shortages in the wrong places, high developer charges and inflexible planning laws are restricting opportunities to meet demand, speed up project timelines, and minimise costs to both builders and their clients,” Ms Wawn said.
Master Builders’ Delivering the housing needs for all Australians recommends policies around housing supply, workforce, supply chain risk and cost pressures, simplifying regulatory settings that support investment in housing and business productivity.
The Property Council of Australia is also in favour of what it classes on its website News & Research page as the emerging build-to-rent sector.
It sees this sector as having the potential to deliver 150,000 new build-to-rent homes into the rental market in the next 10 years (by 2043) and says of a report it commissioned from Ernst Young and published on 4 April 2023:
.. estimates that the current size of the build-to-rent sector in Australia is $16.87 billion (this equates to roughly 0.2 per cent of the total value of the residential housing sector), with the expectation that this value will continue to grow in the coming years. If it reached just 3 per cent of the residential market, it could be worth $290 billion.
In comparison, the build-to-rent sector comprises of 5.4 per cent of the total value of the residential sector in the UK and 12 per cent in the US.
The Housing Industry Association also issued a media release on 28 April 2023 welcoming the National Cabinet’s agreement today to support a range of reforms to address housing supply, stating:
HIA’s Deputy Managing Director – Industry and Policy, Jocelyn Martin said the decision to tackle planning reforms to increase housing supply and affordability ultimately leads to more affordable rental accommodation and provides the capacity to deliver social housing without impacting housing supply more broadly.
On the part of federal and state governments there appears to be an aversion to their having direct ownership of any project building social housing and, on the part of finance and construction industries – along with property developers and investors – there appears to be a similar aversion to such a direct supply of social housing by the first two tiers of government.
Perhaps the smell of desperation in the air – with 243 construction businesses put into insolvency by the Australian Securities & Investment Commission (ASIC) in March 2023 alone, joining an unspecified number of other construction, registered property investment and/or property development corporations within the January to March 1,879 businesses-strong insolvency list – has the National Cabinet seeking to resuscitate more than one bird with its housing funding commitments.
Note: Searchable ASIC list can be found at
https://publishednotices.asic.gov.au/browsesearch-notices/
All these government and non-government actors appear to be suggesting that: after relaxing planning laws; increasing investment opportunities along with potential profits for all classes of investors; and the possibility for individuals, partnerships & corporations to access grants & other benefits in the proposed $10 billion Housing Australia Future Fund; then market forces will inevitably push rental costs down once housing supply increases even though the most optimistic rendition of proposed supply is unlikely to fully meet the nation's unmet secure residential housing need.
My admittedly jaded personal response to the idea that residential rents will significantly reduce over the next 10 years……
I'm hoping that time will prove me wrong.
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